A variety of sources including Forbes, Max Keiser, and FXstreet (Forex) have are reporting a Bank of China announcement suspending all cash transfers for the next several days. The Forbes report states:
“The People’s Bank of China , the central bank, has just ordered commercial banks to halt cash transfers.
In short, there will be a three-day suspension of domestic renminbi transfers. There will also be a suspension, spanning nine calendar days, of conversions of renminbi to foreign currency.
The specific reason given—“system maintenance” at the central bank—is preposterous. It is not credible that during the highest usage period in the year—the weeklong Lunar New Year holiday beginning January 31—the central bank would schedule an upgrade and shut down cash transfers.
A better explanation is that the country’s banking system is running dry.”
This news comes on top of my report yesterday that HSBC bank looked likely to require a bail-in by customers, or a bail out by the Chinese state in the near future, due to the $80bn shortfall in cash. With China now on the brink of a currency crisis, and holder of $1.3trn of US debt, we might want to brace ourselves for a distinctly stormy economic situation, imminently.